S&P, States Decline Settlement Talks in Ratings Cases

July 11 (Bloomberg) -- McGraw Hill Financial Inc.’s
Standard & Poor’s unit and states suing the ratings company
won’t try to settle the litigation at this point, lawyers for
both sides said.

S&P and a lawyer for a group of state attorneys general
were asked about the possibility of settlement discussions by
U.S. District Judge Jesse Furman at a hearing today in Manhattan
federal court. The states claim S&P misrepresented that its
credit ratings on mortgage securities were independent and
objective.

Floyd Abrams, an attorney for New York-based S&P, said it
isn’t the “best time right now” to hold talks.

The U.S. Justice Department and the states sued S&P in
February over credit ratings on mortgage securities. Cases filed
by 14 states and the District of Columbia have been consolidated
in federal court in Manhattan. Furman set an Oct. 4 hearing to
consider the states’ request to send the cases back to state
courts. Lawsuits filed by California, Illinois and Connecticut
are pending in those states.

S&P and the U.S. failed to reach a settlement before the
government sued, and the company “does not believe further
discussions would be fruitful at this time,” Abrams told the
judge in a June 28 letter. He declined to comment after the
hearing today.

Olha N.M. Rybakoff, an attorney for the Tennessee attorney
general’s office and the lead lawyer for the states, said in an
interview after the hearing that both sides will be in a
“better position to revisit settlement” after a decision on
whether the cases will remain in federal court.

The parties would be “remiss if they didn’t make a good-faith effort to discuss settlement,” she said.

The case is In re Standard & Poor’s Rating Agency
Litigation, 13-md-2446, U.S. District Court, Southern District
of New York (Manhattan).